SAN FRANCISCO (12/1/11)--CMG Mortgage Insurance Company's (CMG MI) leadership Wednesday said the company's operations remain strong, and its focus on credit unions' mortgage insurance needs is unaffected by the Nov. 23 announcement that The PMI Group Inc. (TPG), had filed for Chapter 11 federal bankruptcy protection.
PMI Mortgage Insurance Co. (PMI), a subsidiary of TPG, currently owns a 50% stake in CMG MI, with the other 50% owned by Madison, Wis.-based CUNA Mutual Group. CMG MI is a stand-alone, incorporated entity with its own capital and dedicated staffing from its shareholders.
Kim Shaul, CMG MI senior vice president and general manager, said the bankruptcy filing affects only PMI's holding company and will have no impact on CMG MI's operations or claims-paying activities.
Key factors supporting CMG MI's solid financial position are:
- As of Sept. 30, the last available reporting period, CMG MI's risk-to-capital ratio was roughly 20:1. It had the industry's lowest portfolio delinquency ratio at 5.5%.
- As of that date, CMG MI's liquidity-to-reserves ratio was strong, with claims-paying resources backed by cash and readily marketable securities of $330 million. This liquidity compares favorably to the company's $168 million in loss reserves for claims at the end of third quarter, CMG MI said.
- As a separate legal entity, CMG MI's financial strength ratings--BBB (adequate protection parameters) from Standard & Poor's (S&P) and BBB (satisfactory) from Fitch Ratings--are based primarily on CMG MI's own capital, operations performance and loss mitigation, and capital support, staffing, and operational arrangements with its parents, CUNA Mutual Insurance Society and PMI. CMG MI's S&P rating was reaffirmed in September. The Fitch rating was affirmed in July.
- CUNA Mutual Insurance Society's statutory capital grew to $1.4 billion through September, up $40.6 million from year-end 2010. The company holds an "A" (excellent) A.M. Best financial strength rating with a Stable Outlook.
TPG's federal bankruptcy filing followed a Nov. 22 action by the Superior Court of Arizona to uphold the Arizona Department of Insurance's interim control of PMI pending a hearing on the appointment of a receiver over PMI. CMG MI executive management continues to work with the Arizona Department of Insurance to ensure appropriate support for its operations, the company said.